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By Force Solar Engineering Team · Published 12 October 2026 · Updated 12 October 2026

COST & BUDGET

Solar versus diesel: how to work out what a kilowatt-hour really costs you.

Two formulas, three numbers you already have, and the gap between the posted price and the price you actually pay.

Solar array at a Nigerian factory
THE SHORT ANSWER

How do you compare solar with diesel generation?

Price diesel per kilowatt-hour first, because that is the number solar has to beat. Fuel cost per kilowatt-hour is the pump price divided by the kilowatt-hours a litre actually produces. In Nigeria that is about ₦314 to ₦429 per kilowatt-hour at posted pump prices — and about ₦361 to ₦514 at what buyers actually pay.

Use the posted figure to understand the floor and the delivered figure to make a decision. Then work out how many of those kilowatt-hours a day solar can actually serve — that is the only number that turns a comparison into a business case.

THE NUMBER THAT MATTERS

Posted price versus the price you actually pay.

In Nigeria, diesel is routinely bought on the black market, and buyers report paying 15–20% above posted pump prices. Grid tariffs show a comparable gap between the published rate and what a site ends up paying.

Nigeria: published versus effective energy cost
LinePublishedEffective, as reported by buyersBasis
Diesel, per litre₦1,100 to ₦1,500₦1,265 to ₦1,80015–20% above posted, reflecting black-market purchase
Diesel, per kilowatt-hour₦314 to ₦429₦361 to ₦514At about 3.5 kWh per litre, fuel only
Grid, Band A feeder₦209.5About ₦241 to ₦251Published tariff plus the reported 15–20% gap

The published figures are what appear in tariff orders and price reporting; they are the floor, not the bill. The effective figures are what buyers report paying. Neither is a quotation — get your own delivered price and your own feeder’s actual supply before you commit.

STEP ONE

Price the diesel you are displacing.

One division. Use your own delivered price, not a posted national average.

Diesel fuel cost per kilowatt-hour
InputValue usedWhere it comes from
Pump price, posted₦1,100 to ₦1,500 per litreThe range reported across Nigeria in 2026
Black-market premium15–20%Reported by buyers who purchase off the posted network
Delivered price₦1,265 to ₦1,800 per litre₦1,100 × 1.15 to ₦1,500 × 1.20
YieldAbout 3.5 kWh per litreTypical for a mid-size diesel genset at a sensible load
Fuel cost per kWh, posted basis₦314 to ₦429₦1,100 ÷ 3.5 to ₦1,500 ÷ 3.5
Fuel cost per kWh, delivered basis₦361 to ₦514₦1,265 ÷ 3.5 to ₦1,800 ÷ 3.5 — this is the number solar has to beat

All of these are fuel only. Servicing, oil, filters, overhaul and the genset’s own capital cost sit on top.

STEP TWO

Work out how much of it solar can actually serve.

This is where most comparisons go wrong. Solar does not displace the generator — it displaces the generator hours it can cover.

What solar can and cannot displace
PeriodCan solar serve it?What decides
Daytime, load under the array outputYesArray size against the daytime load curve
Daytime, load above the array outputPartlyThe gap falls back on the generator or the grid
Evening and nightOnly with storageBattery kilowatt-hours, and how deep you cycle them
Cloudy daysReducedDesign for the poor months, not the average month

A system sized only to the average day will underperform exactly when you need it most. Size against the poor month and the comparison stays honest.

STEP THREE

Put the two together.

Annual diesel avoided, then the payback. Three inputs, all yours.

The payback formula, with every assumption stated
StepFormulaNote
Daily solar outputarray kW × peak sun hours × performance ratioUse the poor month, not the annual average
Diesel displaced per daythe part of that output your load actually consumesExport to a grid that pays poorly is worth much less
Annual fuel avoideddisplaced kWh × 365 × your fuel cost per kWhUse your delivered price, not the posted one
System costfrom the published price tableConvert at your own rate — we do not publish an exchange rate because it moves weekly
Paybacksystem cost ÷ annual fuel avoidedSanity-check anything under three years before you believe it
WORKED EXAMPLE

The arithmetic, on stated assumptions.

These are assumptions, not a quotation. Change any one of them and the answer changes.

Illustrative comparison — 30 kW array with 64 kWh storage
LineValueAssumption stated
Daily array output30 kW × 5.0 h × 0.8 = 120 kWh/dayPeak sun hours and performance ratio for a good site
Share consumed on site90 kWh/dayLoad consumes three quarters; the rest is exported at a poorer rate
Generator hours removedThose 90 kWh/dayAssumes the load is on during the pumping window
Annual fuel avoided90 × 365 = 32,850 kWhBefore any degradation or downtime
At ₦361/kWhAbout ₦11.9 million a yearDelivered basis, bottom of the range
At ₦514/kWhAbout ₦16.9 million a yearDelivered basis, top of the range
For contrast, at ₦429/kWhAbout ₦14.1 million a yearPosted basis — understates the case if you buy off-market
System price$12,200–13,800Published price for this configuration, equipment FOB
PaybackConvert at your own rateDivide the system price in local currency by the annual figure above

Freight, duty, installation and permits are not in the system price and must be added before the payback means anything. See what is not included.

FOUR TRAPS

What makes this comparison lie to you.

Common errors in a diesel-versus-solar case
TrapWhy it matters
Part-load fuel burnA genset at 30% load burns noticeably more fuel per kilowatt-hour than at 75%. Your real figure is probably worse than 3.5 kWh per litre
Using posted pump pricesIf you buy off-market, the posted price understates your cost by 15–20% and the payback looks longer than it really is
Fuel only, no servicingOil, filters, overhaul and eventual replacement are real costs the fuel figure hides
Sizing to the average monthCloudy weeks cut output exactly when the generator would otherwise be running hardest
Counting exported kilowatt-hours at retail valueWhere net metering pays a generation rate rather than the retail rate, exported output is worth far less than self-consumed output
NEXT STEP

Send the generator record, get the comparison.

Your generator size, the hours it runs and your delivered fuel price are enough for us to run this arithmetic on your site rather than on our assumptions.

Request the comparison
  1. Three-phase solar system prices by size
  2. What is inside a three-phase system price
  3. How to calculate load and backup hours — the other half of the arithmetic
  4. Hybrid system prices by size — the system cost input
  5. Nigeria factory solar sizing — feeder bands and diesel spend

Frequently asked questions

Why does this page show two diesel prices?

Because they answer different questions. The posted price is what appears in reporting and is the floor. The delivered price — 15–20% higher where fuel is bought off the posted network — is what a site actually pays, and it is the one a business case should use.

How many kilowatt-hours does a litre of diesel produce?

About 3.5 for a mid-size genset running at a sensible load. At light load the figure falls, which is why a genset idling overnight is the most expensive power on the site.

Is solar cheaper than a diesel generator?

On fuel cost alone, in most of the markets we work in, yes — but only for the hours solar can actually serve. The honest answer is a number, and it comes from your generator hours and your fuel price.

Do I still need the generator after installing solar?

Usually yes, for the hours and the surge loads solar and storage cannot cover. What changes is how often it runs. Sizing a system to remove the generator entirely is a different and much larger project.

Should I size the battery to run the generator less, or to cut the bill?

They are different objectives. Removing generator hours means sizing against the outage window and the critical load; cutting the bill means sizing against the daytime load curve. Pick one before specifying.

What about servicing and replacement of the generator?

Real costs, and they are not in the fuel-per-kilowatt-hour figure. If your generator is near overhaul, the avoided servicing belongs in the case too.

Does this work where the grid is reliable?

The arithmetic changes but the method does not. Where grid power is cheap and steady, solar competes on price per kilowatt-hour rather than against a generator, and the export rate becomes the deciding number.

START A PROJECT

Send the generator record.

Size, running hours and delivered fuel price. We will run the comparison on your numbers and tell you which configuration the case actually supports.

Request the comparison
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